Every day, consumers pay untold sums to companies that promise a quick credit fix. Most of the time, that money is wasted.

I understand why these offers might seem so enticing. Good credit can get you much better rates for a car or home loan. A bad credit history can leave you stuck with loans carrying high interest rates and other onerous terms. In some cases, bad credit can even cost you a job.

But make no mistake about it. While there are some legitimate credit repair companies, many of the claims you hear advertised are usually false and a con to get your cash.

On my XM radio show, a couple called in recently to ask if they had done the right thing in signing up with a company that said it could remove negative information from their credit files.

Now mind you, the information was correct. It included, among other things, a bankruptcy filing by the couple about five years ago.

In a move to clean those blemishes from their credit record, the couple hired the company, agreeing to pay it a $200 upfront fee. And – this nearly made me fall out of my chair – they agreed to allow $100 to be withdrawn from their bank account each month for ongoing efforts to fix their credit.

I asked the couple for details of the services they were getting. I found out that the so-called credit repair company wasn’t doing anything for them that they couldn’t do for themselves.

I urged them to immediately cancel the contract, telling them they were being scammed. But their response was frustrating. Despite my warnings, I could hear in their voices that they didn’t believe me. They wanted – maybe even needed – to believe the company.

“But they guaranteed they could get the bankruptcy removed,” the wife argued.

“They promised they could improve our scores,” the husband said.

“You know what, you might as well take a $100 bill every month and light a match to it,” I said.

How could I tell that this deal was no good for the couple? There were several signs of trouble.

The first was the upfront fee. Under the federal Credit Repair Organizations Act – enacted to address deceptive and abusive credit repair business practices – it is illegal for companies to charge consumers money before performing the promised credit repair services. Credit repair companies cannot seek payment from you until they have completed the services they have promised.

Next, the company said it could permanently delete accurate, negative information from the couple’s credit files.

That’s a lie.

While you can dispute information in your files that you believe to be false, no credit repair company or individual has the right to remove accurate, current information from a credit report. If the information in your file is correct, only the passage of time can reduce the impact of a negative report. Negative information such as late payments can stay on your credit file for seven years. In the case of a personal bankruptcy filing, it can take 10 years. But don’t despair. The impact of that information on your credit scores is less as the years go by.

Finally, after much discussion, the couple said they would cancel the contract, though I wasn’t totally convinced.

If you’re thinking about responding to a credit repair offer, you should at least know your rights. To avoid being scammed, the Federal Trade Commission says consumers should look for the following warning signs and avoid any firm using these terms:

l The company requires an upfront fee.

l The company says it will dispute all information in your file, including things you know are correct. On that last point you should know better. If the company’s strategy is to lie or dispute accurate information, it’s not a reputable operation.

l Before you sign a contract, the company does not provide you with a copy of the FTC’s “Consumer Credit File Rights Under State and Federal Law,” which outlines what is permissible.

l You are told not to directly contact the credit reporting agencies.

l You are told that the company can get you a new credit identity by applying for an employer identification number, or EIN, from the Internal Revenue Service. The pitch is that you can use this number instead of your Social Security number. If you don’t own a business, this is not a legitimate way to repair your personal credit history. It is a federal crime to obtain an EIN under false pretenses.

If you’ve got some credit issues, the best thing to do is go to www.ftc.gov and get the agency’s free publication, “Credit Repair: Self Help May Be Best.” You can also call toll-free 1-877-FTC-HELP (1-877-382-4357).

I’ll tell you what I told that couple: Don’t waste money on a credit repair service.